Finance Minister Nirmala Sitharaman presented the Union Budget 2026–27 in Parliament on 1 February 2026, outlining the government’s roadmap for economic growth, infrastructure expansion, job creation, youth empowerment, agricultural reforms, and social welfare.
The Budget focuses strongly on investment-led development, boosting manufacturing, logistics, skilling, digital infrastructure, and inclusive growth. Special attention has been given to Yuva Shakti (youth power), infrastructure corridors, innovation, MSMEs, and governance reforms.
The government described the Budget as one that strengthens three broad pillars — growth, inclusion, and sustainability, while accelerating India’s transformation into a developed economy.
Key Highlights of Union Budget 2026–27
Some of the most important announcements from the Union Budget 2026-27 include:
- Fiscal deficit pegged at 4.3% of GDP for 2026–27
- Debt-to-GDP estimated at 55.6%, with a long-term target of 50±1% by 2030
- Seven new high-speed rail corridors
- ₹20,000 crore outlay for carbon-capture technologies over five years
- ₹5,000 crore per City Economic Region for Tier-II and Tier-III cities
- ₹1.4 lakh crore Finance Commission grants to States
- MAT rate cut to 14% and made final tax
- Major customs-duty relief for lithium-ion batteries, aircraft parts, solar glass and nuclear projects
- Incentives for municipal bonds
- Women-focused SHE-Marts
- New Divyangjan skill and assistive-device schemes
- Major push to services sector, healthcare professionals and caregiving
- Tax relief measures for individuals and small taxpayers
Fiscal Consolidation and Budget Estimates
The Finance Minister highlighted that fiscal consolidation remains a key priority while supporting economic growth. The budget estimates for 2026–27 show improvement in key fiscal indicators, reflecting prudent financial management. The government aims to balance expenditure needs with long-term fiscal stability.
- Debt-to-GDP ratio: 55.6% (BE 2026–27)
- Fiscal deficit: 4.3% of GDP (BE 2026–27)
- Non-debt receipts: ₹36.5 lakh crore
- Net tax receipts: ₹28.7 lakh crore
- Total expenditure: ₹53.5 lakh crore
Capital Expenditure Increased to ₹12.2 Lakh Crore
The government continued its strong push for infrastructure-led growth by increasing public capital expenditure. Higher capex is aimed at crowding in private investment and strengthening long-term growth capacity. A new guarantee mechanism was also proposed to reduce project risks.
- Capex for FY 2026–27: ₹12.2 lakh crore
- Infrastructure Risk Guarantee Fund proposed
- Support for private sector confidence in infrastructure projects
Strong Push to Emerging Technologies and AI
Union Budget 2026 placed major emphasis on artificial intelligence and emerging technologies as drivers of inclusive growth. The government aims to prepare a future-ready workforce through large-scale skill development. Several national technology missions will continue to receive support.
- Capacity Building AI Missions: 25 crore people
- Support for National Quantum Mission
- Support for Anusandhan National Research Fund
- Support for R&D and Innovation Fund
Education to Employment and Enterprise Committee
To align education with future job needs, the Finance Minister proposed a new high-level committee. The focus will be on the services sector, employment generation, and exports. The committee will also study the impact of AI on jobs and skills.
- High-Powered Standing Committee proposed
- Focus on services as growth driver
- Target: 10% global share in services by 2047
- Assessment of AI impact on employment
India Semiconductor Mission 2.0
To strengthen strategic manufacturing, the government launched the India Semiconductor Mission 2.0. The mission aims to build domestic capabilities across the semiconductor value chain. It will also focus on research, training, and supply chain resilience.
- Outlay: ₹40,000 crore
- Focus on chip design and manufacturing
- Domestic IP and supply chain strengthening
- Industry-led research and training centres
Shakti Initiative for Semiconductor Ecosystem
Alongside ISM 2.0, a dedicated initiative was announced to deepen the semiconductor ecosystem. The focus will be on skill development and supporting domestic industries. This will help reduce import dependence in critical technologies.
- Outlay: ₹10,000 crore over 5 years
- Support for ecosystem development
- Focus on skilled talent pipeline
Rare Earth Corridors for Critical Minerals
The budget announced steps to strengthen India’s position in critical minerals, especially rare earth elements. Dedicated corridors will be developed in mineral-rich states. The initiative aims to support clean energy, electronics, and strategic industries.
- Rare earth corridors in Odisha, Kerala, Andhra Pradesh, Tamil Nadu
- Focus on mining, processing, research and manufacturing
- Linked to rare earth permanent magnet scheme
Major Support for MSMEs and Micro Enterprises
The Finance Minister announced a comprehensive support package for MSMEs to improve access to finance and ease of doing business. The focus is on credit availability, faster payments, and compliance support. MSMEs are seen as key drivers of employment.
- ₹10,000 crore SME Growth Fund
- ₹2,000 crore top-up to Self-Reliant India Fund
- Over ₹7 lakh crore liquidity support already provided
MSME Financing and Market Reforms
Several structural reforms were announced to strengthen MSME financing systems. These measures aim to ensure timely payments and easier access to credit. Digital platforms will play a central role.
- Mandatory TReDS for CPSE MSME purchases
- Credit guarantee for invoice discounting
- GeM–TReDS integration
- Training of Corporate Mitras for compliance
Railways and Transport Infrastructure
The budget continued to focus on improving logistics and connectivity across the country. New rail corridors will support faster movement of people and goods. Emphasis was placed on sustainable transportation.
- 7 high-speed rail corridors announced
- Dedicated freight corridor from Dankuni to Surat
- Focus on eco-friendly cargo movement
Banking and NBFC Sector Reforms
To prepare the financial sector for future growth, the government proposed a comprehensive review. Public sector NBFCs will also undergo restructuring to improve efficiency and scale.
- High-level committee on banking for Viksit Bharat
- Focus on stability, inclusion and consumer protection
- Restructuring of PFC and REC
Khelo India Mission for Sports Development
The budget announced a new mission to transform the sports sector. Sports are seen as a source of employment, skills, and national talent development. The mission will build on the existing Khelo India program.
- Khelo India Mission to be launched
- Focus on sports talent nurturing
- Employment and skilling opportunities
Textile Sector Integrated Development Programme
To support the labor-intensive textile sector, an integrated program was announced. The aim is to modernize clusters, promote sustainability, and generate employment. Special focus will be given to handlooms and rural industries.
- Mega textile parks in challenge mode
- National Fibre Scheme
- Textile Expansion and Employment Scheme
- SAMARTH 2.0 for textile skilling
Biopharma Shakti and Healthcare Expansion
The Budget announced major initiatives to strengthen healthcare and pharmaceutical manufacturing. The aim is to position India as a global biopharma hub. Both modern and traditional healthcare systems will be expanded.
- Biopharma Shakti: ₹10,000 crore (5 years)
- 3 new NIPER institutes, 7 to be upgraded
- 1,000 clinical trial sites
- Strengthening of CDSCO
Medical Tourism and AYUSH Infrastructure
To boost medical tourism and traditional medicine, new institutions and hubs were proposed. These initiatives aim to improve healthcare services and global outreach.
- 5 regional medical tourism hubs
- 3 new All India Institutes of Ayurveda
- Upgrade of AYUSH pharmacies and labs
- Strengthening WHO Global Traditional Medicine Centre
AVGC Sector and Creative Economy
The budget recognized the growing potential of the AVGC sector. Support will be provided to build skills among students and youth. This will help meet future workforce demand.
- AVGC sector needs 2 million professionals by 2030
- AVGC Content Creator Labs in schools and colleges
- Support to Indian Institute of Creative Technologies
Divyangjan Kaushal Yojana
Special measures were announced to support Divyangjan. The scheme aims to provide skill development and dignified livelihood opportunities.
- Divyangjan Kaushal Yojana proposed
- Focus on inclusive employment and skills
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